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Governor unveils executive budget, F-M to receive less state aid

When New York State Gov. Andrew Cuomo presented his executive state budget proposal on Jan. 16, it included a $769 million increase in overall funding for school operations in the 2018-19 school year.

Of that, $338 million will be in additional foundation aid, which is the primary source of funding for everyday school operations. However, the Fayetteville-Manlius School District would only see a foundation aid increase of $66,799, or 0.7 percent, to support its 2018-19 school budget.

Overall, if the governor’s proposal is enacted, F-M would see a $459,391 drop, or a 2.4 percent decrease, in total state aid because of reductions in expense-driven aid categories such as building aid and reimbursements for BOCES spending.

“Without a more substantial increase in state aid, we will be forced into the unenviable position of  either asking our taxpayers to support a larger share of the budget than in the past or to make cuts to programs and services to balance the budget,” Superintendent Craig J. Tice said. “Neither of those two alternatives is one that the board nor the administration would like to see as their best option going forward.”

The executive budget proposal is the formal beginning of budget negotiations between the governor and the New York State Legislature, with a final state budget due by April 1.

Funding for the district’s operating budget comes from two main sources – state aid and the tax levy, which is the total amount of money the district collects from local property owners. Other smaller revenue sources, such as interest income, make up the district’s remaining revenue sources.

The executive budget proposal shows F-M receiving a total allocation of $18,697,342 for 2018-19.

Of F-M’s total $80,728,938 proposed 2017-18 budget, state aid supported 23.7 percent while the tax levy was budgeted to fund 73.7 percent. The remaining 2.6 percent was expected from sources such as county sales tax and Payment in Lieu of Taxes (PILOT) agreements.

“We would like to see the state fully fund the foundation aid formula in order to support the programs and services we offer our students and that residents have said in our annual budget exit survey that they want maintained,” Dr. Tice said. “This proposed budget continues the trend of shifting the primary responsibility of supporting public education to the local taxpayer.”

Like any business, the school district faces annual cost increases in areas such as employee health insurance and teacher retirement costs. As such, the administration is continuously looking for ways to contain costs. William Furlong, the district’s assistant superintendent for business services, began meeting with district staff in December to discuss department needs and begin developing a preliminary budget proposal, which will be presented to the board of education and community in March.

What is the governor proposing?

Under the governor’s proposal, total school aid for 2018-19 would be $26.4 billion, which represents a statewide increase of 3 percent.

The bulk of the funding increase would go toward three areas: the $338 million in additional foundation aid; $317 million to reimburse districts for designated expenses such as transportation, construction and BOCES services; and a $64 million Fiscal Stabilization Fund.

The proposal also targets additional funding for community schools, pre-kindergarten and after-school programs, teacher development and school breakfast initiatives, which are funds F-M does not anticipate receiving. Other elements that may affect public schools include restrictions on spending and new plans for revenue sources.

General funding less than half of Regents’ recommendation

The governor’s proposed increase in education funding is less than half of the amount recommended by the Board of Regents and the Educational Conference Board (ECB), a coalition of the state’s major education groups. Last fall, the Board of Regents called for an overall $1.6 billion increase in school funding for 2018-19, and ECB estimated $1.5 billion was necessary to maintain current school services next year.

Both groups also asked the state to fully fund and ensure equity in the Foundation Aid Formula. The formula was enacted in 2007 to ensure all school districts have the funding needed to provide students with a sound, basic education, but its phase-in was stalled during the recession. The state currently owes schools $4.2 billion in Foundation Aid based on the formula.

Last year, Gov. Cuomo called for adjustments to the Foundation Aid Formula, but those changes were not enacted in the final state budget. This year, he has proposed a new mandate that would require large school districts to develop plans for how they will distribute their state aid among individual schools each year. In 2018-19, the proposed mandate would apply to districts in cities with populations of more than 125,000, and would be expanded in 2019-20 to include school districts containing at least nine schools and receiving at least 50 percent of their total revenue from the state. These districts would need to submit their aid distribution plans for state approval before the start of each new school year.

New revenue proposals and restrictions in budget proposal

In his budget address, the governor proposed several new “revenue raisers” and restrictions on education spending that would affect schools if implemented, including the following:

STAR: The proposal would hold the value of School Tax Relief (STAR) Basic and Enhanced exemptions for property taxpayers at existing levels rather than allowing them to grow at the current rate of 2 percent annually. It would also make participation in an income verification program mandatory for recipients of Enhanced STAR benefits.

Cap on Expense-based Aids: The proposal calls for a 2 percent cap on the growth in major expense-based aid categories such as construction and transportation beginning in the 2019-20 school year.

Tax Code Changes: The governor shared that the state is exploring ways to restructure its tax code in response to recent tax reforms at the federal level. Some changes could affect school funding such as allowing tax deductible, charitable donations to a public education fund. More details on what the governor is calling the New York State Taxpayer Protection Act are expected in a report from the New York State Department of Taxation and Finance.